Facebook to buy Oculus VR for $2 billion

26 March 2014

By Rick de Klerk

Ready for a mandatory Facebook account in order to experience the power of virtual reality? Or, as several wry wits noted, you now live in a world in which John Carmack works for Facebook. Welcome to the future!

The Business Insider is reporting that Facebook intends to buy Oculus VR — the company behind the incredible Oculus Rift — for a grand total of $2 billion ($400 million cash and 21.3 million shares in Facebook to the current approximate value of $1.6 billion). Mark Zuckerberg, Facebook CEO, states that, “this is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.”

Or, you know, reposts from 9GAG and Snopes-worthy chain emails experienced in stereoscopic 3D. The possibilities are endless!

Palmer Luckey, co-founder of the Rift, stated that while he was “sceptical” about the partnership, it apparently was the right choice. “When Facebook first approached us about partnering, I was sceptical. As I learned more about the company and its vision and spoke with Mark, the partnership not only made sense, but became the clear and obvious path to delivering virtual reality to everyone,” he continues.

I’m not sure how I feel about the acquisition. On the one hand, that’s a lot of money that can hopefully be ploughed into development. On the other, Facebook’s “vision”, as Luckey describes, isn’t exactly a picture of clarity. Facebook hasn’t exactly done gaming any favours, and has questionable practices with relation to the collection of personal information.

Several gaming luminaries have chimed in, including Markus Persson (better known as Notch) of Minecraft fame, who was developing a lightweight version of the game for the platform.

Similarly, Leigh Alexander, well-known gaming journalist, made several observations in a series of Tweets that while Kickstarter isn’t an “investment” platform, it does seem as though the early backers of the Oculus will see little value from their input — shouldering all the downsides of investment (such as project failures and non-delivery) with none of the long-term rewards (such as, you know, a share in $2 billion and a say in its direction) — while Silicon Valley reaps the benefits. She also questioned the potential impact on its design, stating that the Oculus isn’t consumer-friendly and may change for the worst given the need for greater acceptance.

How on earth was Oculus valued at $2 Billion? They didn’t have any market share nearly big enough to require that kind of investment. This is very, very weird. Is Facebook planning to include the Rift technology into augmented reality products?

Alex Rowley

That’s exactly what I was thinking. $2billion on something that has no audience and isn’t even done yet? Madness I say,

Also it’s kinda making Facebooks stock drop lol

Rick de Klerk

I’m perturbed, honestly. Considering that it’s already gone through two additional rounds of funding (one at $19 million, which includes the original Kickstarter, and one at $75 million), Facebook’s $2 billion is grossly wild.

I can only posit that Facebook sees the Oculus as a platform on the level of a device like iPad/iPhone, and wants to be the first in that market — hence my concern about a refactoring of the Rift’s design into something less powerful but more palatable to the average consumer.

It baffles my mind. And I’m less than thrilled, given my excitement for it. Facebook is not a company I trust.

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